Short-Seller Recruits in Homeless Shelters

Short-selling hedge fund manager Steven Eisman's campaign against for-profit educational institutions has been the topic of earlier coverage here, here, and here. Now ProPublica, a non-profit news organization that has been critical of the for-profit colleges, turns against Mr. Eisman with a terrific story disclosing that a researcher for a short-selling fund (it's not clear if it is Mr. Eisman's) rounded up 20 homeless shelter managers to sign a letter the researcher had drafted to the federal secretary of Education complaining that "for-profit trade schools and career colleges are systematically preying upon our clients." Some of the homeless-shelter managers say they didn't know that the woman who drafted and circulated the letter was working for a financial firm that had a stake in the outcome.

From the reader comments on ProPublica: "Companies can't talk up their stock price so I can't understand how short sellers can trash the industry they are shorting. Can someone explain that?"

Bloomberg News, which has also been critical of the for-profit colleges, follows the ProPublica story with its own article headlined, "Attack on For-Profit Colleges Drafted by Short Seller's Researcher."